City of Norman can't afford to give up sources of sales tax growth

 

The proposed 2024-25 Budget stresses the importance of sales tax revenues for funding city goods and services. https://www.normanok.gov/sites/default/files/documents/2024-04/fye_25_budget_book_-_prelim_for_web.pdf

The growth in the City's sales tax revenue base is di cussed and illu trated above. Sales tax is not only the major source of revenue for the City's major operational fund, the General Fund, sales taxi the major (or only) source of revenue related to expand d public safety initiative approved by our voters in 2008 and 2014 • major quality oflife improvement ("Norman Forward") approved in 2015; public transportation (approved in 2019) and for earmarked capital programs originally approved in 1976. The City is dependent on sales tax revenue to fund over half of its general purpose (non-utility Jee base,/) operational and capital programs and is becoming more dependent. (page iii)

The city finance director has painted a pretty bleak general fund trend suggesting at the current rate the city will be bankrupted in 7 years.

At the same time some members of council (particularly Mayor Heikkila) seem more than willing to give up sales tax revenues collected in the UNP north area, which is an area that WILL definitely, 100% grow without a tax diversion.

Common sense suggests that if your expenses are growing at 4% annually and your general fund revenues (sales taxes) are growing only at 2%, then you can't afford to give up any sales tax revenues.

Given the city's reliance on sales taxes to fund the general fund, then the only way to balance things is to reduce general fund expenditures. Most of the general fund goes to personnel - police, fire, public utilities. So if we give up sales tax revenues there is no way possible to fund extra lines in these departments.

You can't grow sales tax base by giving away sales taxes for the next 25 years. The math does not work that way.